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2019 (12) TMI 158

..... Customs Department to respond the present appeal - direction to hand over the investigation to the customs authorities, along with the seized goods and trucks for further investigation - commission of the principal offences under the Customs Act. HELD THAT:- Provisions of Section 67 of the AGST Act contains a clear provision that prior to any inspection, or as a matter prior to any search and seizure, a recording of reasons by the proper officer for such belief is a requirement of the law and only thereupon the process for search, seizure or confiscation can be undertaken - A reading of Sections 100 and 101 of the Customs Act shows that if the proper officer or the empowered officer has reasons to believe that a person to whom the provision applies has secreted about his person any goods or documents liable for confiscation, a search may be conducted and pursuant thereto the subsequent actions be taken which may result in arrest, seizure or confiscation. From the provisions of Section 67 of the AGST Act and 100 and 101 of the Customs Act, a process for search, seizure, confiscation etc for violating any of the provisions of the AGST Act or the Customs Act can only be initiated upon .....

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..... y the respective authorities strictly as per the provisions of the GST Acts, the CrPC/IPC or the Customs Act, as the case may be - petition disposed off. - WA 297/2019 - 25-11-2019 - HONOURABLE MR. JUSTICE ACHINTYA MALLA BUJOR BARUA And HONOURABLE MR. JUSTICE NELSON SAILO FOR THE PETITIONER : DR. A SARAF FOR THE RESPONDENT : SC, FINANCE AND TAXATION JUDGMENT ( AM Bujor Barua, J. ) Heard Dr. A Saraf, learned senior counsel for the appellants. Also heard Mr. D. Saikia, learned senior counsel for the respondents No.1, 4, 5, 6 and 7 and Mr. B Choudhury, learned counsel for the respondents No.2 and 3 as well as Mr. S.C Keyal, learned ASGI for the Customs Department. 2. Considering the conclusion of the learned Single Judge in the judgment and order dated 25.10.2109 in WP(C)No.7081/201 and the other connected writ petitions that the investigation revealed the commission of the principal offences under the Customs Act of 1962 (in short Customs Act) and the consequential direction to hand over the investigation to the customs authorities, along with the seized goods and trucks for further investigation, we required the presence of the authorities under the Customs Department to respond in .....

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..... 762/2019 was preferred for a declaration that the seizure/detention dated 21.08.2019 be declared to be illegal, without jurisdiction, with a further direction to the respondent authorities, more particularly the police officials of Jalukbari Police Station to forthwith release the said goods and to allow the goods to move to its scheduled destination. 7. The appellant took the stand that under Section 67 of the Assam Goods and Services Tax Act, 2017 (for short, AGST Act 2017), the search and seizure can be made only upon the proper officer, being not below the rank of Joint Commissioner, having reason to believe that tax input credit has been claimed in excess of the entitlement under the Act or there has been an evasion of tax payable under the Act. Accordingly, it was the contention that the search and seizure made by the police officials of the Jalukbari Police Station and then go ahead with the investigation and thereafter lodge an ejahar alleging evasion of GST dues, would be an aberration of the established procedure of law. 8. In the affidavit-in-opposition filed by the police authorities in the writ petition, a reference was made to the letter No.DRI F.No.103/DRI/GZU/Enq/Be .....

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..... n of Plant Quarantine (Regulation of Import into India) Order, 2003. 11. In the aforesaid background, the writ petitions preferred by the appellants herein was given a final consideration by the common judgment and order dated 25.10.2019. 12. In the proceeding before the learned Single Judge, it was the contention of the appellants/writ petitioners that the goods in question were seized by the police authorities of Assam on the premises that the trucks carrying the areca nuts were moving from Cachar in Assam towards the State of West Bengal with proper documents and therefore, for the purpose, no detention and seizure of the trucks containing the areca nuts could have been made. In response thereof, it was the contention of the police authorities that under Section 4(2) of the CrPC, the police authorities can investigate any offence, including an offence under the GST Act. Further, an ejahar had also been lodged before the Jalukbari police station alleging that fraud and forgery could be detected in the tax documents submitted by the appellants and hence, over and above it would also be an offence under Sections 120(B)/420/467/471 of the IPC. It being so, a seizure is permissible u .....

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..... r else there would be a distinct possibility of infraction of the fundamental rights under Articles 14, 21 and 22. Further, as the documents produced revealed the commission of the principal offence under the Customs Act, it would be appropriate to hand over the investigation to the authorities under the customs department for further investigation under the Customs Act along with the seized goods and trucks. It was held that the initial seizure of the areca nuts and the trucks by the police authorities of Assam cannot be said to be without authority. Accordingly, it was concluded that no case for interference was made out for acceding to the prayer in the writ petitions for a declaration that the detention of the trucks containing the areca nuts was illegal and unsustainable. 14. Being aggrieved, the intra-court appeals have been preferred. 15. The core contention of Dr. Ashok Saraf, learned senior counsel for the appellants is that Section 67 of the GST Acts provides for the power of inspection, search and seizure for any claim for input tax credit in excess of the entitlements under the Act or for any contravention of the provisions of the Act or the Rules made thereunder to eva .....

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..... y other place. (2) Where the proper officer, not below the rank of Joint Commissioner, either pursuant to an inspection carried out under sub-section (1) or otherwise, has reasons to believe that any goods liable to confiscation or any documents or books or things, which in his opinion shall be useful for or relevant to any proceedings under this Act, are secreted in any place, he may authorise in writing any other officer of central tax to search and seize or may himself search and seize such goods, documents or books or things: Provided that where it is not practicable to seize any such goods, the proper officer, or any officer authorized by him, may serve on the owner or the custodian of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer: Provided further that the documents or books or things so seized shall be retained by such officer only for so long as may be necessary for their examination and for any inquiry or proceedings under this Act. (3) The documents, books or things referred to in sub-section (2) or any other documents, books or things produced by a taxable person or any other p .....

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..... elating to search and seizure, shall, so far as may be, apply to search and seizure under this section subject to the modification that sub-section (5) of section 165 of the said Code shall have effect as if for the word Magistrate , wherever it occurs, the word Commissioner were substituted. (11) Where the proper officer has reasons to believe that any person has evaded or is attempting to evade the payment of any tax, he may, for reasons to be recorded in writing, seize the accounts, registers or documents of such person produced before him and shall grant a receipt for the same, and shall retain the same for so long as may be necessary in connection with any proceedings under this Act or the rules made thereunder for prosecution. (12) The Commissioner or an officer authorised by him may cause purchase of any goods or services or both by any person authorised by him from the business premises of any taxable person, to check the issue of tax invoices or bills of supply by such taxable person, and on return of goods so purchased by such officer, such taxable person or any person in charge of the business premises shall refund the amount so paid towards the goods after cancelling an .....

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..... d in sub-section (2) which are liable to confiscation, or documents relating thereto, he may search that person. (2) The goods referred to in sub-section (1) are the following :- (a) gold ; (b) diamonds; (c) manufactures of gold or diamonds ; (d) watches; (e) any other class of goods which the Central Government may, by notification in the Official Gazette, specify. 22. Both sections 100 and 101 of the Customs Act provide that if the proper officer or the officer of the Customs empowered by a general or a special order of the Principal Commissioner of Customs or Commissioner of Customs has reasons to believe that any person has secreted about his person any of the goods or documents liable for confiscation, such officer may search that person. Upon such search, the person concerned may be arrested under Section 104 and the goods, documents, things etc may be seized under Section 110 of the Act or confiscated under Section 111. 23. A reading of Sections 100 and 101 of the Customs Act shows that if the proper officer or the empowered officer has reasons to believe that a person to whom the provision applies has secreted about his person any goods or documents liable for confiscation, .....

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..... for such fraud or forgery simpliciter, which on its own may be an offence under Sections 120(B)/420/467/471 of the IPC, it would be for the police authorities to proceed against them strictly by following the required procedure prescribed under the CrPC and bring such investigation to its logical end. 28. But as regards the stand of the police authorities of Assam that they have the power to seize any property under Section 102 of the CrPC, it again has to be circumscribed that any seizure effected by invoking Section 102(1) of the CrPC would have to be subjected to the procedure prescribed under Section 102(3), i.e. to forthwith submit a report of the seizure to the Magistrate having jurisdiction over the matter. Without such procedure being undertaken, any detention of the trucks containing the areca nuts and their resultant seizure would have to be said to be without authority and jurisdiction. In the event the seizures are being followed up with submission of reports to the Magistrate having jurisdiction, it would be subjected to the procedures under the CrPC, including that of Section 451. 29. We have also taken note of the report of the Ministry of Agriculture and Farmers We .....

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..... provisions of the GST Acts, the CrPC/IPC or the Customs Act, as the case may be. We also provide that if the police authorities of Assam had already initiated and proceeded against the appellants under the CrPC for the offences under the IPC, the same be continued only by following the procedure provided under the CrPC and the appellants also avail the release of the goods, if lawfully seized as per the provisions of the CrPC. 33. In the event, no such appropriate decision is taken or the matter is proceeded under the appropriate provisions of law, as indicated above, by any of the aforementioned authorities, it would stand declared at the expiry of seven days that the detention and seizure of the 26 numbers of trucks of areca nuts belonging to the appellants would be illegal and unsustainable. It is again provided that in the event any of the three authorities proceeds against the appellants as per the respective laws indicated above, such proceedings shall be subjected to the logical outcome under the GST Acts, CrPC/IPC or the Customs Act, as the case may be. 34. The judgment dated 25.10.2019 in WP(C) No.6762/2019 and other connected writ petitions stands modified as indicated a .....

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